The North Carolina General Assembly is asking state education officials to study ways to improve state funding and services for students with disabilities.
The 2023 state budget requires the Department of Public Instruction (DPI) to recommend changes to the state funding formula for special education. Right now, school districts receive a flat rate of $5,309 per student who qualifies for special education services.
However, that funding is also capped, and a large majority of school districts and many charter schools exceed that cap.
A little over 13% of all North Carolina public school students receive special education services, according to a 2022 report by RTI International commissioned by the General Assembly. Some school districts have much higher concentrations of students with disabilities, ranging to as high as 22% of students in Mitchell County Schools.
Special education funding is capped at up to 13% of a school district or charter school’s student population. That means if more than 13% of students in a district or charter school require special education, their school receives no special funds for the additional students. In a new report to the General Assembly, state education officials recommend eliminating the cap.
The report also recommends calculating state funds for students with disabilities — either physical or attention and learning differences — based on the students’ needs. For example, if a student needs to be in a smaller class or be assigned an individual aide, their school district would receive more funding. The report suggests classifying students into four levels based on the intensity of their needs and assigning weighted funds for each level.
“We're considering staffing as the biggest burden,” DPI’s Senior Director in the Office of School Business Services Jennifer Bennett told the State Board of Education last week.
Bennett said the proposed funding model would not reimburse schools for specific expenses or dictate how they spend the funds. Rather, it would be a different way of distributing available state funding for special education based on the services required, instead of as a flat rate per student.
The General Assembly would have to pass a law for these recommendations to take effect.
Past legislatures have studied similar changes to North Carolina’s school funding model without taking legislative action, but Bennett said right now lawmakers are showing “the highest level of interest we’ve seen in 20 years.”
“And it's of high interest from leadership with the legislature,” State Superintendent Catherine Truitt added.
Placing students with disabilities in specialized private schools
Another provision in the state budget requires the Department of Public Instruction to study how to better serve students with disabilities by placing them in private schools.
Federal law allows states to pay for public schools to transfer students with disabilities to highly specialized private schools. But special education attorney Stacey Gahagan said that policy isn't being widely used in North Carolina, especially compared to states like New York, California and New Jersey.
Gahagan is a partner at Gahagan Paradis law firm. She often represents families who say their local public school is not able to serve their child's specific needs related to a disability.
“What we often see is that those services and access to education just ends up being cut for the students because [public schools] have run out of the tools in their toolbox,” Gahagan said. “What we want to be able to say, is like, ‘Here's another option.’”
One other option is that families can turn to private schools like Melmark in Charlotte, which specifically serves students with developmental disabilities, or the Hill Center in Durham, which caters to students with learning differences and attention deficit disorders.
Gahagan said currently, most public schools in North Carolina don’t have a system in place to refer students to specialized private schools. She said typically only families with financial resources seek out nonpublic special education services and then later apply for federal reimbursements to cover tuition.
An existing state program allows public schools to use state funds to place students in specialized nonpublic schools. But so far there are only four private schools in North Carolina formally approved by DPI for this program, including Melmark and The Hill Center.
Carol Ann Hudgens, DPI’s Senior Director of the Office of Exceptional Children, told the State Board of Education last week that approximately 139 students in North Carolina currently use the program. That represents less than 0.1% of all students with disabilities in the North Carolina public school system.
The study the General Assembly is now requiring would gather information that could be used to build out that program. The State Board of Education received a preliminary report last week to initiate the study, but state education officials are requesting more time to finish the report since it was required in last year’s delayed state budget.
